PeakOil is You
THE Fiat Currency Thread (merged)
Re: New Video: FIAT EMPIRE
by mmasters » Wed 14 Feb 2007, 11:29:46
$this->bbcode_second_pass_quote('', 'M')y question is this. How does Congress repeal the Federal Reserve Act? Or get back to a gold backed currency? Is this possible?
It's within the power of the congress to abolish it. That provision was even put in the Federal Reserve act itself. If I remember right, they can abolish it by majority vote and at the cost of 1 billion dollars (which is not much today, but when the Fed was established in 1913, 1 billion dollars was around 20% of the world's wealth). Of course anyone in congress today suggesting such a course of action would risk their career and possibly their life. It's almost certain this discussion would never make the nightly news.
The question of getting back to a gold and silver currency as written in the constitution is by people making it happen and reinstituting a currency system like this on a local level. When people can gain confidence in this type of money system from seeing how it works as compared to the private debt based fiat system (where our money is constantly losing value) it will have an influencial effect. That is something suggested in the video.
Although the concept of money isn't an easy topic. The debate is mainly over whether fiat money should exist or not or whether a gold and silver based currency should be used. The fiat money arguement on one hand is by having fiat money somebody is being granted the power to create money out of thin air and that power should never be trusted in anyone because history has shown it never to have been used responsibly. Some argue public fiat money in the congress control is the answer, a fiat money that benefits the people instead of the bankers. Then some bring up the valid point that politicians can be corrupted and therefore should not be trusted with managing pubic fiat. While yet further the main debate against gold and silver is that in having a static supply of money, it can't be adapted to facilitate changing trade conditions.
As you can see there's no easy answers but nearly everyone agrees the private debt based fiat system we have today owned and run by the central banks is about the WORST possible currency system imaginable.
$this->bbcode_second_pass_quote('', 'C')an you ever see the US government (or any other government, for that matter) enacting some kind of legislation that would prevent them from spending more than they receive in taxes? Has it gone too far?
Believe it or not it doesn't work that way. The taxes we pay the government are specifically for paying interest on government debt. In reality we are really paying tax money to the Fed for money they created out of nothing and gave to government. The burden on the people doesn't stop there because after the Fed creates whatever money the government wants that money gets introduced into the economy through government spending. Once it enters the banking system this new money facilitates more new money to be created in the form of new loans (typically by a factor of 10) and this increasing of money is what makes our current money worth less and is the real cause of inflation.
Definitely try to watch more, or if you're really interested there's another great video to see on the subject matter called "The Money Masters". Also a good in depth book called "The Creature from Jekyll Island". Lastly, there's a recent video called "From Freedom to Fascism" which focuses largely on the tax system aspect.
$this->bbcode_second_pass_quote('', 'A')re we doomed to remain in thrall to central banks until the excrement hits the fans?
Personally I think we're doomed to it until TSHTF but after that I think it's possible enough people could wake up to the problem that it may change things. Of course education is key.
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Re: New Video: FIAT EMPIRE
by gampy » Wed 14 Feb 2007, 19:04:25
Are there any currencies in the world backed by gold?
What did Argentina do after their collapse?
I have seen Freedom to Fascism, and the money masters, good introduction to the subject, if a little overly dramatic.
You make the good point of whether Congress, or any group can be trusted with the oversight of the money supply. Or anything else, I would say.
This is the problem with our current paradigm. It's beyond the ability of anyone or any group to manage it wisely, or altruistically I think. I have the feeling that Congress would prefer to leave things as they are. Especially once they are educated about the issue by the banks themselves.
I can not see any shift against this current debt based system until it comes up against the wall.
What did Argentina do after their collapse?
I have seen Freedom to Fascism, and the money masters, good introduction to the subject, if a little overly dramatic.
You make the good point of whether Congress, or any group can be trusted with the oversight of the money supply. Or anything else, I would say.
This is the problem with our current paradigm. It's beyond the ability of anyone or any group to manage it wisely, or altruistically I think. I have the feeling that Congress would prefer to leave things as they are. Especially once they are educated about the issue by the banks themselves.
I can not see any shift against this current debt based system until it comes up against the wall.
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Will oil depletion end the fiat money system?
by JustWatch » Thu 08 Mar 2007, 14:07:36
An argument I hear concerns the fiat money system being a pyramid scheme. I used to think it was, but it isn’t. Please allow me to explain this issue in more detail, and give argument that it is faulty to think our money system as such.
In earlier times during the gold standard, there could be two different and distinct types. The honest one was required to hold gold on reserve that would exactly match the amount of currency or notes in circulation. The dishonest system was dishonest because it would issue fake notes for which gold did not exist. In the case of the dishonest system, this was a pyramid scheme. The problem was that the bank would continue to issue fake notes by lending that were not backed by gold in the vault. As more and more of these fake notes were issued, eventually it became apparent there would become so many claims existing for this available gold that the bank could not keep up with the demand. If the bank had only issued a very small number of illicit notes this would not be a problem because it would be rare or unlikely that all the notes would come back to the bank at the same time.
When the bank issued too many fake notes, the only way they could keep the system afloat was to encourage more savers to bring in their gold coin for deposit with the bank, which would keep the vault supplied with gold. But as more and more fake notes were issued, this became impossible because of the limited amount of gold in circulation and available. What the bank would do to encourage more savers to come and deposit gold coin was to offer a higher rate of interest on the deposits. This only made the problem worse for the bank, since now they had to pay more interest, which meant they were making even less profit on the loans they sold. Being greedy, they would all too often continue to lend more and more until the depositors became aware of the scam and started a bank run. Of course the last holders of these notes found themselves holding the bag.
BUT, and this is a very, very big BUT, when the money system was changed to complete fiat, things were very different. Now the notes were not claims against anything, except of course for yet more claims for yet more fake notes. So all the bank had to do if someone came into the bank to get their money was to give them some. If they were out of it, why they just went into the back room and told the printing press operator to fire the dang thing up. Viola!
The rest is history and much debated by persons who have no idea of what is going on. Like all things that at first seem very complex and impossible to understand, it is found to be completely simple once it is understood.
All the arguments concerning just how the banks shuffle money about or just how much they lend into circulation have no bearing whatsoever on the validity of the argument. Nor does the amount they lend into circulation have any bearing, because all the bank has to do is print more and let the government spend it in order to keep the money system adequately supplied. I will explain below.
Of course the other argument concerns the fact that since the interest on the loans must be repaid and doesn’t yet exist has to be explained. The problem seems to be that if no new loans are made then the money supply can’t possibly pay the principal as well as all the interest. This is not a problem at all for the bank or the money system. Most of that money is often held by borrowers who owe it to businesses or individuals. In the event the loan holders cannot repay because they cannot get enough to pay it back they default. Someone loses, but the money system doesn’t have to stop. TPTB can issue all the fake notes they want, so there is no reason for them to be concerned about it all.
There is no reason to ever assume that all this mountain of debt would ever have to be repaid all at once. That simply won’t happen. Then even if loans are halted entirely the money system could keep going. The outstanding loans would have to be repaid with money already in existence. Once it began to run out, the government could simply spend a bunch of money and build some roads or something, or give out huge government contracts or whatever to put more money into circulation, they don’t have to loan it out. They could simply spend as much as they wanted in order to put more money into circulation by spending it on Medicaid and The Military Industrial Complex or thousands and thousands of other social programs and welfare giveaways as they are doing right now. Problem solved.
Of course the fact that the GAO accounting office would have to keep the total amount of money owed continually growing larger and ever larger is not a real problem either. They can put any figure they want on that piece of paper no matter how huge because it will only be a problem if the users of said fake notes become unwilling to use them.
The government is allowing this increase on the account to occur right now, it is up to 8.82 trillion dollars as I write this here in the USA. I wish it was not so. If you are not familiar with just how much money a trillion dollars is, allow me to give an example. If you were to take a trillion dollars and stack them one on top of the next, that stack would be 70,402 miles high! With our total outstanding debt, this would create a stack 612,500 miles high. (I’m not sure, but isn’t that into what is known as outer space?)LOL!
Our fiat money system is dishonest and unfair to all of us. We the people are being given the short end of the stick in this regard because the continuous inflation of the money supply is constantly eating away at the buying power of our savings.
The issue of what effect the coming depletion of oil will have on our money system is difficult to determine. It is most certainly a topic worthy of much discussion. I am very thankful that this forum has a section devoted to this issue, since this also concerns all of us and our future on this earth.
Have a nice day!
(Edited to correct the math on the dollar stack. I measured a one-dollar bill with a micrometer. It measures .0044 inches. The micrometer screw was snugged rather tightly against the bill while this was done. Check my math if you wish.)
Two things are infinite: the universe and human stupidity; and I'm not sure about the universe.
Albert Einstein
In earlier times during the gold standard, there could be two different and distinct types. The honest one was required to hold gold on reserve that would exactly match the amount of currency or notes in circulation. The dishonest system was dishonest because it would issue fake notes for which gold did not exist. In the case of the dishonest system, this was a pyramid scheme. The problem was that the bank would continue to issue fake notes by lending that were not backed by gold in the vault. As more and more of these fake notes were issued, eventually it became apparent there would become so many claims existing for this available gold that the bank could not keep up with the demand. If the bank had only issued a very small number of illicit notes this would not be a problem because it would be rare or unlikely that all the notes would come back to the bank at the same time.
When the bank issued too many fake notes, the only way they could keep the system afloat was to encourage more savers to bring in their gold coin for deposit with the bank, which would keep the vault supplied with gold. But as more and more fake notes were issued, this became impossible because of the limited amount of gold in circulation and available. What the bank would do to encourage more savers to come and deposit gold coin was to offer a higher rate of interest on the deposits. This only made the problem worse for the bank, since now they had to pay more interest, which meant they were making even less profit on the loans they sold. Being greedy, they would all too often continue to lend more and more until the depositors became aware of the scam and started a bank run. Of course the last holders of these notes found themselves holding the bag.
BUT, and this is a very, very big BUT, when the money system was changed to complete fiat, things were very different. Now the notes were not claims against anything, except of course for yet more claims for yet more fake notes. So all the bank had to do if someone came into the bank to get their money was to give them some. If they were out of it, why they just went into the back room and told the printing press operator to fire the dang thing up. Viola!
The rest is history and much debated by persons who have no idea of what is going on. Like all things that at first seem very complex and impossible to understand, it is found to be completely simple once it is understood.
All the arguments concerning just how the banks shuffle money about or just how much they lend into circulation have no bearing whatsoever on the validity of the argument. Nor does the amount they lend into circulation have any bearing, because all the bank has to do is print more and let the government spend it in order to keep the money system adequately supplied. I will explain below.
Of course the other argument concerns the fact that since the interest on the loans must be repaid and doesn’t yet exist has to be explained. The problem seems to be that if no new loans are made then the money supply can’t possibly pay the principal as well as all the interest. This is not a problem at all for the bank or the money system. Most of that money is often held by borrowers who owe it to businesses or individuals. In the event the loan holders cannot repay because they cannot get enough to pay it back they default. Someone loses, but the money system doesn’t have to stop. TPTB can issue all the fake notes they want, so there is no reason for them to be concerned about it all.
There is no reason to ever assume that all this mountain of debt would ever have to be repaid all at once. That simply won’t happen. Then even if loans are halted entirely the money system could keep going. The outstanding loans would have to be repaid with money already in existence. Once it began to run out, the government could simply spend a bunch of money and build some roads or something, or give out huge government contracts or whatever to put more money into circulation, they don’t have to loan it out. They could simply spend as much as they wanted in order to put more money into circulation by spending it on Medicaid and The Military Industrial Complex or thousands and thousands of other social programs and welfare giveaways as they are doing right now. Problem solved.
Of course the fact that the GAO accounting office would have to keep the total amount of money owed continually growing larger and ever larger is not a real problem either. They can put any figure they want on that piece of paper no matter how huge because it will only be a problem if the users of said fake notes become unwilling to use them.
The government is allowing this increase on the account to occur right now, it is up to 8.82 trillion dollars as I write this here in the USA. I wish it was not so. If you are not familiar with just how much money a trillion dollars is, allow me to give an example. If you were to take a trillion dollars and stack them one on top of the next, that stack would be 70,402 miles high! With our total outstanding debt, this would create a stack 612,500 miles high. (I’m not sure, but isn’t that into what is known as outer space?)LOL!
Our fiat money system is dishonest and unfair to all of us. We the people are being given the short end of the stick in this regard because the continuous inflation of the money supply is constantly eating away at the buying power of our savings.
The issue of what effect the coming depletion of oil will have on our money system is difficult to determine. It is most certainly a topic worthy of much discussion. I am very thankful that this forum has a section devoted to this issue, since this also concerns all of us and our future on this earth.
Have a nice day!
(Edited to correct the math on the dollar stack. I measured a one-dollar bill with a micrometer. It measures .0044 inches. The micrometer screw was snugged rather tightly against the bill while this was done. Check my math if you wish.)
Two things are infinite: the universe and human stupidity; and I'm not sure about the universe.
Albert Einstein
Last edited by Ferretlover on Sun 01 Mar 2009, 13:00:37, edited 6 times in total.
Reason: Merged with THE Fiat Currency Thread.
Reason: Merged with THE Fiat Currency Thread.
They understand the fact that true democracy is nothing but a fallacy whereby idiots are elected into power and these idiots then have to cater to the morons that elected them in the first place.
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Re: Will oil depletion end the fiat money system?
by Micki » Thu 08 Mar 2007, 17:41:40
I have very mixed feelings about the whole topic and as much as I think fiat currency is an abomination I think it will be around for a long time.
Reason being that the alternative is that every currency otherwise is switched from fiat to something hard asset backed.
If US$ for instance goes down the drain, it will not necessarily lead to end of the fiat system. Just like Weimar was an isoleted event, US currency can go under without dragging every other currency with it. Although commodities for instance should gain, I think money would simply move into other countries currencies.
Sure economic turmol will be global, but global distrust in fiat..I just think it is a big step.
People are not educated about the alternatives and most economists keep their mouths shut and traders like inflation cause nominal values climb.
We would need to see a major sentiment shift.
So what's for US if their currency goes down?
They will probably try with a new fresh start, like introducing the Amero, and PROMISE to excersice fiscal dicipline this time.
Only if this is not accepted, will they look at something like gold backed currency.
Reason being that the alternative is that every currency otherwise is switched from fiat to something hard asset backed.
If US$ for instance goes down the drain, it will not necessarily lead to end of the fiat system. Just like Weimar was an isoleted event, US currency can go under without dragging every other currency with it. Although commodities for instance should gain, I think money would simply move into other countries currencies.
Sure economic turmol will be global, but global distrust in fiat..I just think it is a big step.
People are not educated about the alternatives and most economists keep their mouths shut and traders like inflation cause nominal values climb.
We would need to see a major sentiment shift.
So what's for US if their currency goes down?
They will probably try with a new fresh start, like introducing the Amero, and PROMISE to excersice fiscal dicipline this time.
Only if this is not accepted, will they look at something like gold backed currency.
- Micki
Re: Will oil depletion end the fiat money system?
by Concerned » Thu 08 Mar 2007, 18:22:40
$this->bbcode_second_pass_quote('JustWatch', '
')There is no reason to ever assume that all this mountain of debt would ever have to be repaid all at once. That simply won’t happen.
')There is no reason to ever assume that all this mountain of debt would ever have to be repaid all at once. That simply won’t happen.
Ever heard of a run on the bank?
"Once the game is over, the king and the pawn go back in the same box."
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-Italian Proverb
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